U.S. v. Cooper, 78-1702

• Decision Date: 16 April 1979
• Docket Number: No. 78-1702,78-1702
• Citation: 596 F.2d 327
• Parties: 4 Fed. R. Evid. Serv. 621 UNITED STATES of America, Appellee, v. Sammy Joe COOPER, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 327

596 F.2d 327

4 Fed. R. Evid. Serv. 621

UNITED STATES of America, Appellee, v. Sammy Joe COOPER, Appellant.

No. 78-1702.

United States Court of Appeals Eighth Circuit.

Submitted March 12, 1979.

Decided April 16, 1979.

Warner Moore of Moore & Irby, Wichita, Kan., for appellant.

J. Whitfield Moody, Asst. U. S. Atty., Kansas City, Mo., argued, Ronald S. Reed, Jr., U. S. Atty., Kansas City, Mo., on brief, for appellee.

Before LAY, ROSS and McMILLIAN, Circuit Judges.

ROSS, Circuit Judge.

Appellant Sammy Joe Cooper challenges his conviction by the district court ¹ of three counts of mail fraud in violation of 18 U.S.C. § 1341. We affirm.

Appellant operated a used car business in Lebanon, Missouri and in July of 1976 entered into a banking arrangement with officers of the Commerce Bank of Lebanon (Commerce). Under this arrangement Commerce extended a $30,000 line of credit to appellant secured by an inventory of his used cars. Additionally Commerce agreed to give appellant immediate credit on sight drafts presented to Commerce by the appellant for collection on cars sold by him.

The government's chief witness was Marc Gorges. Gorges testified that in October 1976 he purchased cars from the appellant for his used car business under an agreement whereby appellant delivered the cars to him and a sight draft containing the titles was forwarded to the First Bank and Trust in Sand Springs, Oklahoma (First Bank) where Gorges honored the drafts. From this course of dealing the scheme forming the basis of the three count indictment ² developed. The appellant presented seven sight drafts to Commerce on three separate occasions ³ on cars that Gorges had not and did not intend to purchase. The bank then forwarded these drafts to First Bank to be honored by Gorges. Gorges was to honor the drafts with money furnished by appellant by means of presigned blank checks drawn on his account at Commerce. This scheme permitted appellant to borrow the money on the sight drafts for the period of time it took for the transactions to clear the two banks. This float was possible because appellant received immediate credit in the amount of each sight draft deposited with Commerce. Gorges testified that prior to the seven sight drafts forming the basis of the indictment the scheme operated successfully and was not detected by either bank. The scheme broke down when Gorges refused to honor the seven drafts and they were returned unpaid to Commerce. He refused to honor them because several of appellant's presigned blank checks failed to clear Commerce due to insufficient funds. When the sight drafts failed to clear First Bank they were returned unhonored to Commerce. Commerce contacted appellant and at a meeting between officers of Commerce and appellant the scheme was uncovered. Gorges testified that appellant felt this scheme was necessary because he was at the limit of his line of credit with Commerce and needed money to repair used cars for resale.

Appellant raises several issues on appeal. First he argues that the district court evidenced "residual doubt" about his guilt and therefore erred in submitting the case to the jury. In this regard he argues that the mailings were not shown to be sufficiently closely related to his scheme to bring his conduct within 18 U.S.C. § 1341. Additionally he contends that the evidence was not sufficient to show his willful misuse of the mails. He also claims that the court erred in refusing to give an unrequested accomplice instruction and finally, Cooper contends that the trial judge erred in his interrogation of him.

Appellant testified in his own behalf after his motion for a directed verdict of acquittal was denied. Therefore we view all the evidence presented at trial in the light most favorable to the jury's verdict and accept as established all reasonable inferences which support the verdict. United States v. Lambros, 564 F.2d 26, 28 (8th Cir. 1977), Cert. denied, 434 U.S. 1074, 98 S.Ct. 1262, 55 L.Ed.2d 779 (1978). The verdict of the jury must be sustained if there is substantial evidence, whether direct or circumstantial, supporting it. United States v. Lambros, supra, 564 F.2d at 28.

To establish a violation of § 1341 the government must prove a scheme to defraud and the mailing of a letter or other instrument for the purpose of executing the scheme. Pereira v. United States, 347 U.S. 1, 74 S.Ct. 358, 98 L.Ed. 435 (1954); United States v. Brown, 540 F.2d 364, 373-74 (8th Cir. 1976). Although "it is not necessary that the scheme contemplate the use of the mails as an essential element," Pereira v. United States,supra, 347 U.S. at 8, 74 S.Ct. at 362, it is necessary for the mailings to be "sufficiently closely related to (appellant's) scheme to bring his conduct within the statute." United States v. Maze, 414 U.S. 395, 399, 94 S.Ct. 645, 648, 38 L.Ed.2d 603 (1974). If the appellant's scheme reached fruition prior to the mailings as did the respondents in United States v. Maze, supra, 414 U.S. at 402, 94 S.Ct. 645, the mailings were not sufficiently related to the scheme to bring his conduct within the statute.

Check kiting schemes are within the reach of the federal mail fraud statutes. United States v. Gross, 416 F.2d 1205, 1212 (8th Cir. 1969), Cert. denied, 397 U.S. 1013, 90 S.Ct. 1245, 25 L.Ed.2d 427 (1970). Our examination of the evidence in this case convinces us that this scheme was a check kiting activity which produced a float of bank funds available to appellant. The government established a time lag between the depositing of the sight drafts with Commerce and the time they were to be honored at First Bank. The float did not reach fruition at the time appellant presented the sight drafts to Commerce and received immediate credit for them. The float was not completed until the drafts were mailed by Commerce to First Bank and honored. In fact it was not until November 1976 that the scheme was detected because until then all the sight drafts were honored by Gorges. We therefore hold that this scheme was sufficiently closely related to the mailings to bring it within the mail fraud statute. United States v. Miles, 498 F.2d 394, Cert. denied, 419 U.S. 1021, 95 S.Ct. 495, 42 L.Ed.2d 294 (8th Cir. 1974).

Appellant argues the evidence did not show that he personally mailed the sight drafts or that there was a willful misuse of the mails. The mailing requirement of 18 U.S.C. § 1341 requires only that the defendant caused the use of...